asked the Minister for Finance whether he is aware that the proposal of the Bank of Ireland to introduce risk premiums in the form of extra interest which is charged on loans which are not considered safe would be seriously detrimental to developing small businesses; and, if so, if he will take such steps as are necessary to prevent the implementation of the proposal.
Ceisteanna—Questions Oral Answers - Bank's Risk Premium Plan.
3.
I take it the Deputy is referring to reports of a recent speech by the Chief Executive of the Bank of Ireland in which he referred, inter alia, to lending risks and the possibility of risk premiums. My Department have been assured by the Bank of Ireland that it did not propose the introduction of such premiums.
I might add that the regulation of bank interest rates is a matter for the Central Bank. That bank also has confirmed that no proposal in relation to risk premiums has been put to it for consideration.
I am interested to hear the Minister say that the Bank of Ireland have assured his Department that they do not propose this. Is he aware that Mr. Hely Hutchinson was reported directly in two newspaper articles as having proposed this and he went further and suggested that the IDA should provide a subsidy to small developing new industries in order to enable them to pay the risk premium? Perhaps the Minister would indicate what Mr. Hely Hutchinson was talking about.
I agree the gentleman in question was reported as having said that: I am sure the Deputy will agree I cannot take responsibility for statements made by people in the position of the gentleman to whom he has referred. I have been assured by the bank in question that it does not propose the introduction of such premiums. Equally, I have been informed by the Central Bank, which deals with the regulation of interest rates, that no proposal of that kind was put to the Central Bank.